Getting Started with CRM, Part 1

How do businesses get started with customer relationship management? What's the optimal methodology? What's the most reliable approach? Who offers the best solution? A CRM expert tackles these and other questions in the first of two parts.
Much of my reader feedback centers upon the following questions: How should my organization get started with customer relationship management? What's the optimal methodology? What's the most reliable approach? Who offers the best solution? What's the best training and certification program for designing and implementing CRM?

A category so vast and complex (incorporating e-marketing and campaign management, customer data warehouse mining and analysis, branding and customer experience design, sales force automation, call centers, and customer service) can be difficult to understand. There are many software vendors and professional services organizations all making claims about CRM and its impact on sales, profitability, and productivity. No wonder many people are confused.

While there's a tremendous amount of information about CRM strategy, process design, and technology options to explore, there's no single, clear authoritative source of how to design and implement a CRM system, much less engender and instill a customer-centered strategy or culture in an organization.

For better and for worse, CRM is still an art form, not a true science. That said, I've found three principles underlying the design and launch of the most successful CRM implementations:

  • Explore all viable options that have potential for generating superior value, based on your company's core competencies, relative to your competition.

  • Select from these possibilities those that best meet your investment return, risk appetite, technical architecture (ease of implementation), organizational readiness and management talent, passion and commitment.

  • Design and actively manage your CRM implementation strategy and plan.

In this, the first of a two-part column, I'll discuss the first of these three steps. In the next installment, I'll cover steps two and three.

Step 1: Explore All Viable Options

This step requires creative thinking. It might be the most readily achievable step, but perhaps the least fully explored.

The single greatest benefit of this first step is to avoid the common mistake of thinking that CRM is just about customer intimacy and loyalty, and rushing off to buy a software package which purports to do just that. The fact is that implementing a CRM strategy doesn't always mean implementing CRM technology.

CRM is really about developing strategies and tactics that will enable you to achieve a competitive advantage -- differentiate your product or service from the competition, enhance loyalty (lower attrition, customer acquisition costs), increase revenues (up sell, cross sell, market share), lower costs.

In my experience, I've seen clients achieve considerable improvements in customer service quality, market share, and sales productivity without a single piece of new technology. They were achieved strictly by thinking creatively, working more closely as a team, and making tough decisions. The results were more compelling value for customers, higher productivity and teamwork (less political in-fighting), more effective business process design, more careful alignment of incentives for customers, and, frankly, simply more enlightened and effective leadership.

In this brainstorming stage, it's important to explore all your options and examine -- at least on a high-level -- what technologies, processes, and organizational structures and skill sets can help you enable these strategies and tactics within your budget.

In terms of technology, most people assume that all CRM begins with a data management strategy -- deciding what customer information can help you better understand and predict their individual interests, needs, and buying behaviors. But your initial approach doesnt have to be so data-centric.

Focused customer analysis and competitive intelligence can give you a pretty good idea of what customers want and are willing to pay for, which in turn should give you some good thoughts on exchanging your perceived value by adding to your offering convenience, features, or personalized self-service.

This brainstorming exercise is best done by a multi-disciplinary task force -- perhaps facilitated or augmented by a third party -- to ensure a diversity of contributions and points of view. This step also requires a good deal of customer, organizational, supply chain, and technical architecture research and assessment, which needs to be completed in preparation for the brainstorming task force sessions.

Tomorrow's column will discuss the remaining two steps essential to launching an effective CRM campaign.

Arthur O'Connor is a columnist for, an site, and this year serves as the chairperson of the Institute for International Research's CRM Conference. He has more than 20 years of management experience in customer management, strategy, and new business development.

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